NEW DELHI/MUMBAI: Fortis promoters Malvinder and Shivinder Singh have approached the Supreme Court (SC) asking for permission to sell their Fortis Healthcare shares already pledged with banks and financial institutions to reduce debt.

One of the promoter firms of the Singh family, Fortis Healthcare Holding (FHHPL), has created a fresh pledge of nearly 30.59 lakh shares representing 0.59% of the total equity on August 14 with Indiabulls Housing Finance, according to a company disclosure filed with the stock exchange.

As on June 2017, FHHPL held 36.51% stake in the company of which 36.01% has been pledged. The Supreme Court on August 11 directed RHC Holdings and Oscar Investments, companies controlled by the Singhs, to maintain “status quo” with regards to shareholding of FHHPL in the hospital group. FHHPL is jointly owned by RHC and Oscar.

A spokesperson for RHC told ET that it cannot comment on its new application as the matter is sub judice.

However he denied any violation of the Court order RHC Holdings and Oscar Investments have now approached the apex court seeking clarity on the order and a direction that it be limited to shares other than those they have pledged to banks and financial institutions. The sale of these shares are being made after obtaining prior consent of the pledgee(s), according to them.

“It is submitted that the said direction will not, in any event, have an impact on the potential creditors and the availability of these funds will only help pare down debt,” state the applications, which ET has seen. The two promoter entities need to pay Rs 468.37 crore and `966.36 crore by August and November end respectively in lieu of repayment of interest and principal amount to its creditors. The court is likely to hear this application next week, a source close to the development said.

NEW PLEDGE A VIOLATION: EXPERTSSecurities lawyers, however, said that creation of fresh pledge post the Supreme Court order clearly violates the order. “If Fortis Healthcare Holdings Private Limited has pledged it shares in Fortis Healthcare Limited post August 11 2017, then it is a direct violation of the Supreme Court order,” said Huzefa Nasikwala, founder, Nasikwala Law Office.

PR Ramesh, a senior consultant in the capital markets & securities law practice at ELP added that promoters cannot create pledge or change the status of their shares once the apex court asked them to maintain the status quo.

RHC Holdings spokesperson said: “The said shares were already under encumbrance under a loan facility agreement with Indiabulls Housing Finance. Indiabulls has exercised its right under the said arrangement to convert the encumbrance into pledge on August 14. “We informed all our lenders regarding the decision of Supreme Court and in fact asked them not to change the status quo of the securities”.

According to RHC and Oscar’s latest applications, the value of the unencumbered assets disclosed to the Delhi court was derived by excluding borrowings against the encumbered shares. If these encumbered shares are sold to pay off lenders, it will only reduce the debt and will not negatively impact the value of the unencumbered assets disclosed, according to the applications.